Sands Financial Management NewsLatest financial management newsCopyright @Sands Financial Managementhttp://www.sands-fm.co.uk
Tue, 20 February 2018 13:34:38Tue, 20 February 2018 13:34:38Congratulations DebbieSandshttp://www.sands-fm.co.uk/news/2018/february/20/congratulations-debbie/Congratulations to Debbie who recently sat an Anti Money Laundering exam and passed with distinction.http://www.sands-fm.co.uk/news/2018/february/20/congratulations-debbie/
http://www.sands-fm.co.uk/news/2018/february/20/congratulations-debbie/Tue, 20 February 2018 13:34:38 Congratulations PaigeSandshttp://www.sands-fm.co.uk/news/2018/january/15/congratulations-paige/Congratulations to Paige, who successfully passed her FA1 Life and Pensions exam in December 2017. Keep up the good work Paige!http://www.sands-fm.co.uk/news/2018/january/15/congratulations-paige/
http://www.sands-fm.co.uk/news/2018/january/15/congratulations-paige/Mon, 15 January 2018 13:40:57 Pensions – No time like the present!Sandshttp://www.sands-fm.co.uk/news/2017/pensions-no-time-like-the-present/It has long been recognised that medical advances, combined with a greater understanding of the impact of our lifestyle choices upon our health, have led to an increase in life expectancy. Looking ahead, future generations are, on average, likely to enjoy much longer and healthier lives than their predecessors. Estimates from the Office for National Statistics (ONS) show that, a 21-year-old female living in the UK has an average life expectancy of 92, with a 25% chance of reaching 100. Source: https://visual.ons.gov.uk/what-are-your-chances-of-living-to-100/ This means that millions of people will spend around one-third of their life in retirement! With this in mind, it has never been more important to consider how you intend to fund your retirement. If your retirement plans include holidays, visiting relatives and treating yourself on occasion, then it’s time to take control of your savings – and your future – and start building up your own retirement fund. The earlier you begin, the more scope you allow your savings to grow, so don’t put it off. For more information and guidance, talk to one of our financial advisers on 01462 420234http://www.sands-fm.co.uk/news/2017/pensions-no-time-like-the-present/
http://www.sands-fm.co.uk/news/2017/pensions-no-time-like-the-present/Thu, 09 November 2017 11:18:20 Interesting Times....................Sandshttp://www.sands-fm.co.uk/news/2017/interesting-times/Last week the Bank of England’s policymakers decided to increase interest rates by 0.25% to 0.50% and although it was a small increase, it is still significant as it is the first time in over a decade that interest rates have risen. Many of our mortgage clients are on fixed rates so are unaffected in the short term but this will affect those whose products are currently on base rate trackers or discounted variable rate products. A by-product of the rate rise is that it has started to affect the Buy to Let stress calculations which lenders use to determine how much they will allow landlords to borrow. Based upon a rental income of £975pm, some banks would lend approximately £8,000 less than they would have done this time last week! Looking ahead, the EY ITEM Club (a non-governmental forecast group) have urged the MPC to “sit tight” after the initial increase to gauge the response of businesses and consumers which we think makes sense. If your mortgage is currently on a variable, discounted or tracker rate, we would encourage you to talk to one of our Advisers so that we can help you understand how the interest rate rise will affect your monthly expenditure and discuss the options available to you.http://www.sands-fm.co.uk/news/2017/interesting-times/
http://www.sands-fm.co.uk/news/2017/interesting-times/Thu, 09 November 2017 11:03:58 Baby! BabySandshttp://www.sands-fm.co.uk/news/2017/baby-baby/There certainly seems to be something in the water at the moment with many of our clients expecting new additions to their families in 2018! According to Mother &amp; Baby the top 5 baby names in the UK for 2017 are: Olivia Noah Amelia Harry Emily Oliver Isla Jack Ava Charlie If you are expecting an addition to the family (or if your family has grown since we last saw you), then it’s worth talking to us about how we can help protect you and your loved ones financially, for the future. A simple Family Income Benefit policy for example can provide your family with a regular monthly income should the worst happen to you whilst the children are young. This can be a lot less expensive than you might think with £2,000 of cover each month costing from as little as £10.50 per month* *(Based upon an 18-year term for a 29-year old non-smoker) Talk to one of our advisers to see how we can help you protect your family on 01462 420234http://www.sands-fm.co.uk/news/2017/baby-baby/
http://www.sands-fm.co.uk/news/2017/baby-baby/Thu, 09 November 2017 10:26:09 Fantastic AchievementSandshttp://www.sands-fm.co.uk/news/2017/june/01/fantastic-achievement/Well done to Andy, Gina &amp; Matt who completed the gruelling 26 miles of the Edinburgh Marathon in May of this year. They raised over £1500 between them and donated the money for Cancer Research. Great achievement and they did the team proud!http://www.sands-fm.co.uk/news/2017/june/01/fantastic-achievement/
http://www.sands-fm.co.uk/news/2017/june/01/fantastic-achievement/Thu, 01 June 2017 11:10:58 Congratulations AndySandshttp://www.sands-fm.co.uk/news/2017/congratulations-andy/Well done to Andy who completed his CeMAP exam to become a qualified Mortgage &amp; Protection Adviser. Well done to Andy who passed his CeMAP exam in December 2016 to become a qualified Mortgage &amp; Protection Adviser.http://www.sands-fm.co.uk/news/2017/congratulations-andy/
http://www.sands-fm.co.uk/news/2017/congratulations-andy/Fri, 13 January 2017 12:21:33 When critical illness cover becomes a life-saverSandshttp://www.sands-fm.co.uk/news/2017/february/20/when-critical-illness-cover-becomes-a-life-saver/October is Breast Cancer Awareness month, which focuses on increasing understanding of the disease and raising money to fund research into a cure. Breast cancer is the most common form of cancer and affects one in eight women. Along with all the difficulties associated with its diagnosis and treatment, cancer often wreaks financial havoc as sufferers have to take extended time off work to recover, making it difficult to keep up with mortgage payments and household bills. Monique Oakley’s story shows how vital it is to have the right insurance policy in place. Monique Oakley, a 41-year-old special needs teacher in Lincolnshire, was diagnosed with breast cancer in December last year. Mrs Oakley, who lives in Grimsby with her husband Paul and daughters, Brooke, 16, and Holly, 13, said her husband insisted they take out a joint critical illness policy following the birth of their first child. They paid £62 a month in premiums. In November last year she started a new teaching job at a school and just five weeks later was diagnosed with breast cancer. She successfully claimed £89,926 on her critical illness policy through Ageas Protect. Here’s her story; “At first, you can’t believe it’s happened to you. The critical illness cover ironically has been a lifesaver because I was entitled to the statutory sick pay. We’ve been able to pay off a large part of our mortgage and have set aside some funds to cover bills that might come up in the near future. Looking back I am so pleased Paul was so sensible. I honestly don’t know how we would be coping at the moment had we not been relieved of some of the financial burden we would otherwise be facing.” Around 12,000 women and 80 men die from breast cancer each year, however more people are surviving breast cancer than ever before thanks to advances in research, new treatments, earlier diagnosis, screening and breast cancer awareness. Fantastic news. However, the cost is high for sufferers as they go through treatment and effectively put their lives on hold. This is where critical illness cover can prove vital. Policyholders pay a monthly sum for cover lasting a set number of years. If they suffer any of a list of major diseases – notably cancer, strokes or heart attacks – the policy pays out a lump sum. Yet women are still reluctant to take proactive steps to protect themselves financially in case they become ill. Tom Baigrie, chief executive of advice firm LifeSearch, explains why critical illness cover is vitally important; “Being able to cover the bills and pay for medical treatment while keeping the family financially secure removes any financial headaches at what can be a very emotional time,” Not all critical illness cover offers the same level of protection so it is important to look at what’s on offer and read the policy documentation carefully. The monthly premiums vary widely between providers and depend mainly on a person’s age, health and lifestyle choices. It is worth noting that not all critical illness claims are successful. Five things to look for when choosing a critical illness policy: Look at the number of medical conditions covered by the policy. The norm is around 40 to 50 so be wary of anything below this, and be aware that you are only covered for the conditions shown on the list. The definitions used for each condition will also vary by insurer. It is important to look for products which include cover for early stage cancers and not just advanced cancers. Consider the monthly cost. The cheapest is rarely the best, but that doesn’t mean that the dearest will be the best either. Be aware of how much each insurer will pay out for various conditions and make sure you are happy the payout would cover your costs. Look for added value benefits such as free children’s cover, access to counselling and expert medical opinions. As with any big decision, it’s important to get the right advice to ensure you choose the right level of cover for you and your family. Source: The Telegraph. www.telegraph.co.uk on 13 Oct 2014http://www.sands-fm.co.uk/news/2017/february/20/when-critical-illness-cover-becomes-a-life-saver/
http://www.sands-fm.co.uk/news/2017/february/20/when-critical-illness-cover-becomes-a-life-saver/Fri, 20 November 2015 14:40:36 The pension changes explainedSandshttp://www.sands-fm.co.uk/news/2017/february/19/the-pension-changes-explained/Many retirees have awaited eagerly for the opportunity to unlock their pension savings, but for some the promise of Pension Freedoms and having greater choice over how they spend their retirement pots hasn’t quite lived up to expectation. Here’s an overview of the changes and a look at some of the pitfalls. 1. Who is affected by the changes? The changes introduced in April 2015 affect around 4.5 million people with Defined Contribution (DC) schemes. With this type of scheme your monthly pension savings go into a big pot, which will eventually be used to buy an income for your retirement. You can now access that pot freely from the age of 55 (57 from 2028), taking out as much as you like, subject to tax. Some people with Defined Benefit (DB) pensions - which promise a particular annual income - will be able to swap them for DC schemes. 2. How much tax will I have to pay? You can take 25% of your pension pot as a tax-free lump sum. Or you can take out smaller amounts, of which the first 25% will be tax free on each occasion. You will have to pay income tax on the amount you withdraw over and above the 25% tax-free allowance. If that amount, added to the rest of your income, exceeds £42,386 (2015-16), for example, you will pay tax at 40% or more. If the amount exceeds £100,000, you will begin to lose your personal allowance, resulting in an even higher tax charge. 3. What tax will I have to pay if I buy a pension income? If you buy an annuity (an income for life), or you take income drawdown (leaving your pension pot invested), you will only pay tax on the income. Anyone with total income below £10,600 in 2015-16 will not pay anything. 4. How easy is it to pass on a pension to my dependants? The new rules make it easier. If you die before the age of 75, the pension pot can be passed on tax free. If you die after 75, and your descendants want the whole pot as a lump sum, they will have to pay 45% tax, instead of 55% previously. Those who draw down income from an inherited pot will however pay tax at their marginal rate. 5. Are annuities still a good idea? The pension changes mean that many people who would have bought an annuity, will not now do so. Income drawdown is a more flexible option for many. For many people, annuities may still be the best option - or a mixture of an annuity and drawdown. Before you decide, it’s important to get professional financial advice to understand your options and make the right decision for you and your future. 6. Can I sell an annuity if I have already bought one? From April 2016 you may be able swap your annuity for cash, from April 2016. However, no one knows how much demand there will be for second-hand annuities. Many suspect that those selling their annuities will find it hard to get a good price. 7. What if I am in a Defined Benefit (DB) scheme - can I move to a DC scheme? In theory you can - if your employer allows it. Transferring to a DC scheme means you could get your money out more easily, and pass it on to descendants. But again, you may not get the best value. DB schemes usually offer inflation proofing, and the ability to pass some of the income on to a spouse. They also have a particular advantage if you are getting close to the maximum amount you are allowed to have in a pension pot. Again, getting the right advice is key. 8. What are the new rules on how much you can save in a pension? From 6 April 2016, the maximum you can have in a pension pot will be £1m, reduced from £1.25m. This figure will rise with inflation from April 2018. In real terms, a 60 year-old spending all their £1m pension pot on an inflation-linked annuity could - according to current annuity rates - expect a maximum annual income of around £27,000. You can have a larger pension pot if you wish, but you will pay 55% tax on any withdrawals. However, anyone in a DB scheme will be treated more generously. Such schemes have a notional capital value, calculated by multiplying the annual income by 20. So if the scheme pays an income of £10,000 a year, the notional value of the pension pot is £200,000. Given that the maximum pot will now be £1m, members of DB schemes can therefore expect annual incomes of up to £50,000. The annual allowance for pensions savings remains at £40,000. 9. Is the state pension changing? Yes. From 6 April 2016. The additional state pension and part of pension credit is being abolished, to be replaced with a single-tier state pension. The rate will rise from £113 a week to around £155, but the precise amount will be set towards the end of 2015. However, most people will not qualify for the full pension, as their schemes were contracted out of the second state pension, and they paid lower National Insurance (NI) contributions as a result. To qualify for the full pension, you will now need 35 years of NI contributions, instead of 30 previously. 10. What advice is available? Free guidance - not advice - is available through the Pension Wise website . Those aged 55 or above can book a telephone interview with the Pensions Advisory Service, or a face-to-face interview with Citizens Advice. The service will give general guidance , but cannot advise on specific pension policies or investments. The best route is to seek professional financial advice. The Pitfalls The Pension Freedoms have many advantages, but it’s worth remembering the pitfalls too; Taking money out of your pension could still land you with a large tax bill. From next year, a new limit on the total size of a pension pot could mean your income from an annuity will be less than you expect. Many in the industry fear a new wave of fraud . It will soon become harder to qualify for a full state pension . Without proper advice, the changes could make it easier to run out of money before you die. What is right for you? Everyone has different ideas about their retirement. What is right for you depends on your circumstances. It’s important to review your pension savings and estimate the income you are likely to receive in retirement. If there’s a shortfall, the earlier you spot it, the easier it will be to fix. The point is don’t be tempted to make rash decisions. Instead take independent financial advice to make sure that you are doing the right thing, both now and for the future, to ensure that your pension savings are able to support you through retirement. Source: thisismoney.com/pensionshttp://www.sands-fm.co.uk/news/2017/february/19/the-pension-changes-explained/
http://www.sands-fm.co.uk/news/2017/february/19/the-pension-changes-explained/Thu, 19 November 2015 14:41:24 Crackdown on mortgage interest tax relief for buy-to-let landlordsSandshttp://www.sands-fm.co.uk/news/2017/february/18/crackdown-on-mortgage-interest-tax-relief-for-buy-to-let-landlords/In this summers’ Budget in July, George Osborne introduced a crackdown on mortgage interest tax relief which will affect thousands of buy-to-let landlords. Currently, landlords can claim tax relief on monthly interest repayments at the top level of tax they pay (up to 45%). In a move which will 'level the playing field for homebuyers and investors', the amount landlords can claim as relief will be set at the basic rate of tax (20%). Over recent years the buy-to-let sector has boomed, with buy-to-let lending accounting for more than 15 per cent of mortgages taken out over the past 12 months. The crackdown on tax relief will be phased in over a four-year period from April 2017. Gráinne Gilmore, head of UK residential research at estate agents Knight Frank, said: “This is a significant change for those with a rental portfolio, although the measured rate of introduction between 2017 and 2020 will help landlords plan their approach”. The changes will impact middle-class landlords who have a sole buy-to-let property right through to professional landlords with bigger portfolios. Experts warn that some investors would now struggle to turn a profit. Phil Nicklin, from Deloitte, said: “This measure will almost double the effective cost of borrowing for a taxpayer on the highest rate of tax. A landlord who borrows at even a modest level might end up paying more in tax than he makes in profit.” The move could also force landlords to hike rents to compensate for the blow, which would spell bad news for tenants. The budget document states that: 'The current tax system supports landlords over and above ordinary homeowners’. It’s fair to say that the 45 per cent tax relief puts landlords at an advantage in the property market against first-time buyers. So the move could mean good news for first-time buyers who are competing with landlords on the property market, which is currently seeing demand outstripping supply. Those planning to purchase a buy-to-let property will have to factor these new rules into their calculations, which could make buy-to-let investment a less attractive proposition in future. It may also reduce the options for those who see it as an alternative to a pension. Other changes The budget document has also revealed the current system that allows those to claim 10% of their rent for wear and tear will be scrapped. From next April, landlords will only be able to deduct costs they actually incur. The Chancellor also announced an increase in the amount of money homeowners can earn in rent from lodgers before tax. It comes after many campaigned for a higher earning level in the rent-a-room scheme. The level has been set at £4,250 of income for the past 18 years, but will rise to £7,500 from April 2016. Matt Hutchinson, director of website Spare Room has campaigned for the last six years for a higher threshold. He said: “There are an estimated 19million empty bedrooms in owner-occupied properties in England alone. Freeing up just five per cent of those rooms would accommodate almost a million people - the equivalent of a city the size of Birmingham. Encouraging people to take in lodgers could help them avoid repossession when interest rates rise and their mortgage repayments are adjusted.” Buy-to-let is a popular option for those who would rather grow their wealth through property than shares or cash. However, it's important to know what you’re getting into and to carefully consider the pitfalls. If you want to know more please give call us. We are helping clients in similar situations to plan their future and will help you understand your options so you can make the right choice, whether that’s to buy-to-let or not. Sources: www.guardian.com (Article: 16 July 2015). www.hmrc.gov.uk (Published paper: 'Restricting Financial Cost Relief for Individual Landlords' 8 July 2015).http://www.sands-fm.co.uk/news/2017/february/18/crackdown-on-mortgage-interest-tax-relief-for-buy-to-let-landlords/
http://www.sands-fm.co.uk/news/2017/february/18/crackdown-on-mortgage-interest-tax-relief-for-buy-to-let-landlords/Wed, 18 November 2015 14:42:15